May 2008

The Economics Party

My jaw dropped when I heard that presidential candidate Clinton dismissed the unified opinion of every economist on the planet and supported the gas tax rebate. The rebate is John McCain’s proposal. I think that proves both of them are unqualified to be president. Obama isn’t much better when it comes to sorting out economic policy from pandering, although he did avoid that particular landmine.

So I decided to start my own political party. I call it the Economics Party. There’s no paperwork involved, and you don’t even have to stop being a Democrat or Republican or whatever to join. The Economics Party won’t have its own candidates. All we’ll do is agree to vote for the candidate with the best long term economic policy, according to the consensus of leading economists.

The Economics Party would ignore superstition in its decisions. Here are a few things I think would end up on the platform, assuming most leading economists agree:

We’d make some exceptions for humanitarian reasons. For example, if a natural disaster hits a poor part of the country, it might be cheaper to let everyone die, but you have to put life ahead of money at some point.

The platform might look Libertarian, but it has differences. For example, a Libertarian might be opposed to the government making people wear motorcycle helmets. The Economics Party would just look at the likely higher cost of insurance in a helmet-free world and decide on that basis. I don’t know which way it would come out.

The Economics Party would be committed to changing its policy recommendation whenever the facts warranted. We’re pro flip-flop when it makes sense. In other words, our brains function properly.

If thirty or forty million people join the Economics Party, all major candidates would have to start paying attention to the consensus of economists. At the very least, voters would become more aware of what the leading economists think makes sense. That seems like a good thing.

Comments

The critical point in all of this is the phrase "consensus of leading economists". With the present state of the art what that actually means is asking those economists to choose a model of the economy that all, or the majority, agree most accurately predicts the future. Of course you don't actually need economists to rate the available models, they only need to provide them and then they can be independently rated using historical data.

But in choosing the correct model you've only met the first challenge, next you need to feed it with accurate starting values (not always available) and interpret the way each political candidate's policies will affect the economy (almost impossible). And finally you have to evaluate the outcome of each scenario against every other, weighing total wealth and wealth distribution including a value for every man, woman, child, unborn child, animal, plant and structure.

But no-one would really need to fully understand the accepted model; if it performs accurately that's enough. And when it fails it can be replaced with a better one. In fact you don't need the economists at all, just some way of producing an accurate model, possibly using a neural network plus a genetic algorithm.

Then to get accurate information into the model you could let it collect it itself; allow it access to all of the available information directly in real time. There are many systems that already collect statistical data from many published sources, so use the best of these and add all of the information held by the government in all of their databases.

That only leaves the evaluation of the total wealth at the end of each scenario. At first this would still be a job for the economists and their advisors (how much is a sunset worth, etc.) but over time the model would grow to include the knowledge to do this itself. Anything less would risk being influenced by prejudice and superstition.

After a few years it would become clear that the models predictions are good enough, and elections are no longer necessary; just let the model choose the winner. Then, as our wealth grows and grows, it will become clear that it would be better to use the model to also select candidates for office directly. And the best candidates will certainly be those with only one policy, to make every decision based upon the predictions of the all knowing, all powerful, economic model.

As you point out yourself, 'at some point, you have to put life ahead of money'.
You would also have to put quality of life ahead of money at many points, that includes e.g. the lives of non-productive people: the sick, the old, the incompetent ones. Wouldn't you agree they have a right to live (in a decent way)? We spend (waist?) a lot of money to make live more decent for these people. That doesn't make economic sense, but I'm willing to pay for it.

"The Economics Party would just look at the likely higher cost of insurance in a helmet-free world and decide on that basis.

I hope that "leading economists" have heard of *risk homeostasis*: if drivers increase their risky behavior because they are using helmets, seat belts, airbags, absurdly low speed limits, and SUVs (but not mobile phones), what have you gained besides a reduction in freedom?

Instead of a mess case-by-case examination of every issue, how about *rule utilitarianism*? For example, how about a general policy of maximum decentralization: federal to state, and state to local? Economists should agree on that: they don't like monopolies, and they do like something approaching perfectly competitive market. Competitive federalism: let the states compete amongst themselves for customers.

"Strong education policy"--what does that mean? How about a policy that produces a strong education industry, like the same policy (none) that produced the world-leading US universities?

Great idea. Economists have a way of thinking through unintended consequences that we sorely need.

On helmets: I'm not sure why insurance companies couldn't handle it on their own, and just lower rates for riders who agree to wear helmets. Just deny coverage if they agreed to lower rates and crash without a helmet. It's not like a rider with a serious head injury is likely to put his helmet on.

I'm fairly neutral on abortion but I think most people will have a hard time seeing what economics has to do with it...and whatever the economics based argument is, I suspect a lot of people will find it repulsive. Might be best to avoid that one.

Finally, this could be disastrous unless economists take care to take externalities into account. They've done a very poor job of considering overall long-term costs of environmental damage. Even now, the GDP doesn't take environmental health into account, even though the present value of the long-term costs we're likely to face is huge.

Good first step. But go little bit forward.
How you imagine "limited government" and congruently "aggressive energy policy" and "Strong education policy". It is nonsense. Limited government shouldn't have anything like energy and education policy. Peoples are responsible for procuring their energy needs and for education of their children, not government (if you think opposite, you are not differ from Obama or Clinton).

I see a number of posts about fuel costs... $4 a gallon? thats 3.3 Litres in the US isnt it? lucky buggers :p

its now averaging about £1.10 here in the uk per liter (about £3.70 per US gallon - which is about $7 a gallon.) fun times.

I wanna move to Germany :p

The party makes some sense - but it does seem a very frightening concept - like something from a cyber-punk futuristic movie, for example - it is infinately cheaper to execute anyone who would go to prison than maintain prison facilities and staff them... (50c of electricity and a furnace to destroy the bodies compared to what, $50k a year per prisoner overheads - and when they get out they may be likely to go ahead and do it again...) financially - it makes perfect sense, but morally... well... it scales, but is a frightening concept (considering 90% of criminals are probabyl a victim of circumstance (e.g provocation - not paying attention and ploughing into a bus que, being so desperate for cash they hold up a liquor store etc etc. the rest are probably psychotic and should be executed anyway :p)

The bug issue is where to exactly draw the line.
Someone will think having poor niggers flooded is not that bad.
Some will think killing poor embryos is worse than killing people in a country far away.

If you can set this better, the party is going to enjoy some success.

Anyway, wonderful idea, I'd love to be in but I'm italian... Should this thing start I'll do my best to support it anyway.

Two economists, three opinions, Scott. I mean, there are things where there is a practical consensus on - and a billion other things where heavy feuding still occurs (read an Economics journal - remove decorum and they'll descend to name-calling).

Many members of my AP Economics course suggested doing this (that was 3 years ago now). As time goes on, I witness more ignorance or pandering on the part of politicians and I learn more in economics (my current major) and the idea just seems better and better. Neither of the two major parties, nor any currently defined third parties (the libertarians are just as bad as any of the others because they ignore public goods and externalities) line up well at all with economics. Impartial ratings and endorsements, if enough voters listened, would fix that.

In the meantime, I know he isn't perfect, but Obama is clearly the optimal candidate in terms of economics.